Campaign Promises

Cabinet/Departments -> Treasury -> Corporate Taxes


ItemTreasury
Corporate TaxesGrade
TY-1
The Promise: "Eliminating special tax breaks for oil and gas companies: including repealing special expensing rules, foreign tax credit benefits, and manufacturing deductions for oil and gas firms."
When/Where: Barak Obama's "Comprehensive Tax Plan" dated 08/20/08.
Source: http://halebobb.com/Obama/Factsheet_Tax_Plan_FINAL.pdf
Status:This promise is related to Promise EN-41.

President Obama's FY2010 budget proposal sought to reduce oil and gas industry tax break incentives by $31.5B. Congress did not go along.

On 06/15/10, the Democrat-led Senate rejected (35 for, 61 against) an amendment introduced by Senator Bernie Sanders (I-VT) that would have ended tax breaks for oil and gas producers over the period CY2010 through CY2020.

In his FY2011 budget proposal, President Obama again called for repealing $38.8 billion worth of tax breaks for oil, natural gas and coal companies over a decade.

On 09/09/10, President Obama stated that by simply eliminating manufacturing tax breaks received by oil and gas companies, the U.S. budget deficit could be reduced by $15B.

On 04/26/11, President Obama urged Congress to take immediate action to end tax subsidies for oil and gas companies. In response, Senate Democrats announced a plan on 05/10/11 to eliminate tax breaks for the nation's top five oil companies, a move that would reportedly have saved $21B over 10 years. On 05/17/11, a procedural motion received only 52 of the 60 Senate votes needed to move the bill forward and it saw no further action.

While initial progress had been made toward promise fulfillment, it appeared that this initiative died as of end-CY2011 when a supercommittee failed to deliver on its mandate to trim $1.2T from the national budget deficit.

Since then, Senator Robert Menendez (D-NJ) introduced the "Repeal Big Oil Tax Subsidies Act" (S.2204) on 03/19/12, dovetailing on his "Close Big Oil Tax Loopholes Act" (S. 258) introduced on 02/02/11. He went further by introducing the "Close Big Oil Tax Loopholes Act" (S. 940) on 05/10/11.

On the House side, the "Clean Energy Jobs Act of 2012" (H.R. 4108) was introduced by Congresswoman Shelley Berkeley (D-NV) on 02/29/12. None of the above bills progressed beyond preliminary committee reviews and they expired with the 112th Congress at the end of CY2012.

As of early-CY2013, this promise has not been fulfilled.
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TY-2
The Promise: "Will eliminate all capital gains taxes on investments in small and start-up firms."
When/Where: Barak Obama's "Comprehensive Tax Plan" dated 08/20/08.
Source: http://halebobb.com/Obama/Factsheet_Tax_Plan_FINAL.pdf
Status:Under the American Recovery and Reinvestment Act of 2009, signed into law 02/17/09, investors in small businesses were able to exclude 75% of their gain from capital gains taxes -- not 100% ("all capital gains taxes") as promised.

The Small Business Jobs and Credit Act of 2010 (H.R. 5297), signed into law by President Obama on 09/27/10, exempted 100% of the taxes on capital gains for angel and venture capital investors on small business investments if held for five years. This was a short term solution to spur investment in small businesses immediately and applied only for stocks bought prior to the end of CY2010.

On 01/01/11, the exclusion rates return to 50% for C-Corporations with less than $50M in assets and 60% for select businesses in empowerment zones.

President Obama's promise to eliminate "all" capital gains taxes on investments in small and start-up firms has not been fulfilled.
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TY-3
The Promise: "Raise the small business investment expensing limit to $250,000 through the end of 2009."
When/Where: Obama-Biden Plan: "Revitalize the Economy," dated 11/07/08.
Source: http://www.asbl.com/documents/Economy_Change.pdf
Status:Section 179 of the American Recovery and Reinvestment Act of 2009 (ARRA) stipulated that small businesses could elect to expense up to $250,000 of the cost of qualifying property. The $250,000 amount provided under the new law is reduced if the cost of all section 179 property placed in service by the taxpayer during the tax year exceeded $800,000.

These provisions were repeated in Section 201 of the Hiring Incentives to Restore Employment Act (H.R. 2847) signed into law by President Obama on 03/18/10 and remained in effect until 12/31/10.

Promise fulfilled.
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TY-4
The Promise: "During 2009 and 2010, existing businesses will receive a $3,000 refundable tax credit for each additional full-time employee hired."
When/Where: Obama-Biden Plan: "Revitalize the Economy," dated 11/07/08.
Source: http://www.asbl.com/documents/Economy_Change.pdf
Status:This promise sounded good at the time but was probably not fully thought out by the Obama-Biden team. Initial estimates were that this promise would have cost $40-50B over a two year period.

This promise was excluded from American Recovery and Reinvestment Act of 2009, signed into law 02/17/09. The promise was also excluded from the President's FY2010 budget proposal.

Unemployment increases since 02/09 may have forced reconsideration, as President Obama proposed raising the tax credit level for each newly hired person to $5,000 during his State of the Union address of 01/27/10. At that time, he said that the $5,000 per-worker tax credit he proposed would be available to businesses of any size, and would be retroactive to the start of 2010. Sounded good.

On 03/18/10, reality set in and President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847) into law. Section 101 of this bill provides a tax exemption for non-federal or state employers for qualified employees hired between 02/03/10 and 12/31/10 who have not been employed for more than 40 hours during the 60-day period prior to employment.

The non-refundable tax credit was limited to the "lesser of $1,000 or" 6.2% of wages paid during the 52-week period following employment. The estimated cost of this initiative stood at $30-100B, reportedly to be funded from left-over Troubled Asset Relief Program (TARP) funds.

Thus, the tax credit did not apply to CY2009 as promised, was not refundable, and in principle was limited to $1,000, not $3,000.

This promise has not been fulfilled.
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TY-5
The Promise: "Will extend the federal Production Tax Credit (PTC) for 5 years to encourage the production of renewable energy."
When/Where: Obama-Biden Plan: "New Energy for America", dated 09/06/08.
Source: http://energy.gov/sites/prod/files/edg/media/Obama_New_Energy_0804.pdf
Status:The American Recovery and Reinvestment Act of 2009, signed into law 02/17/09, extended the PTC for 3 years to CY2012, not 5 years as promised.

On 08/02/12, the Senate Finance Committee added an additional one-year extension of the $12B PTC as part of a larger tax credit extension bill.

On 01/01/13, President Obama signed the "American Taxpayer Relief Act of 2012" (H.R. 8), extending the PTC for facilities producing energy from renewable resources by one additional year to 01/01/14. In the aggregate, PTC extensions equaled five years during President Obama's first term in office.

This promise has been fulfilled.
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TY-6
The Promise: "Require publicly traded financial partnerships to pay the corporate income tax."
When/Where: Interview with Tax Policy Center of Urban and Brookings Institutions dated 08/15/08.
Source: http://www.taxpolicycenter.org/UploadedPDF/411749_updated_candidates.pdf
Status:Participants in Publicly Traded Partnerships (PTP) are taxed on the money distributed by the partnership. Unlike a corporation, a PTP itself does not pay taxes on its income. Income is only taxed once when it is distributed to general and limited partners.

This is why businesses organized as PTPs are known not to pay one penny in federal corporate income tax. Rather, they rely on "pass-throughs," meaning that they pass profits to investors. It is these investors who pay taxes through their individual tax returns on monies received.

As of early-CY2013, this promise has not been fulfilled.
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TY-7
The Promise: "...will also create a new Small Business Health Tax Credit to provide small businesses with a refundable tax credit of up to 50 percent on premiums paid by small businesses on behalf of their employees."
When/Where: Obama-Biden Plan: "To Lower Health Care Costs and Ensure Affordable, Accessible Health Coverage for All" dated 10/03/08.
Source: http://courses.ischool.berkeley.edu/i202/f08/lectures/Obama_Healthcare-1.pdf
Status:First, the definition of a "small business" in the United States is one that has less than 500 employees and meets regulatory requirements established by the Small Business Administration under 13 CFR Part 121.

Under the Patient Protection and Affordable Care Act (Public Law 111-148) signed into law by President Obama on 03/23/10, small businesses with no more than 25 employees receive a non-refundable tax credit of 35% of contributions made toward the health care premiums of their employees during the period CY2010-2013. That percentage increases to 50% starting in CY2014.

First, the tax credit does not apply to all businesses classified as "small business", and secondly, the tax credit is not refundable as promised.

This promise has not been fulfilled.
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TY-8
The Promise: "Will target tax incentives to lure businesses to the hardest hit areas of the Gulf Coast including downtown New Orleans and St. Bernard Parish."
When/Where: Obama-Biden Plan: "Rebuilding the Gulf Coast and Preventing Future Catastrophes", dated 09/11/08.
Source: http://blatantreality.com/wp-content/uploads/2009/05/obama_factsheet_katrina.pdf
Status:The Gulf Opportunity Zone (GO Zone) Act of 2005 was signed into law on 12/22/05 by President Bush. It provided tax relief for recovery efforts in the states of Louisiana, Mississippi and Alabama, devastated by Hurricane Katrina, for a period of five years. It also provided incentives and tax relief to states affected by Hurricanes Rita and Wilma, similar to the assistance provided under the Katrina Emergency Tax Relief Act (Public Law 109-73) signed into law by President Bush on 09/23/05.

Since these CY2005 initiatives, there have been no new tax incentives or credits introduced by the Obama Administration to lure businesses to the Gulf, New Orleans, and/or Saint Bernard Parish other than the one-year extension of the above bonds under the Tax Relief, Unemployment Insurance Authorization and Job Creation Act of 2010.

Senator Mary Landrieu (D-LA) introduced a bill (S. 30) on 01/25/11 to amend the Internal Revenue code of 1986 to provide an additional year (through end-CY2012) for the incentives found in the GO Zone Act. Congressman Cedric Richmond (D-LA) introduced a virtually identical bill in the House (H.R. 559) of 02/08/11. Both bills expired without action with the 112th Congress at the end of CY2012.

The New Orleans and Saint Bernard Parish areas have benefitted from the "New Market Tax Credit" (NMTC) since its inception in CY2000. For FY2011, Louisiana was the beneficiary of $295M in NMTC, all of which, except for $53M for Baton Rouge, went to New Orleans.

In addition, Louisiana has benefited from pre-CY2009 federal-level Rehabilitation Tax Credits, GO Zone Bonus Depreciation, and GO Zone Bonds programs as well as other state-level tax incentives/credits.

This promise has not been fulfilled.
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TY-9
The Promise: "Make permanent R&D credit and renewable energy production tax credit."
When/Where: Interview with Tax Policy Center of Urban and Brookings Institutions dated 08/15/08.
Source: http://www.taxpolicycenter.org/UploadedPDF/411749_updated_candidates.pdf
Status:The Research and Development Tax Credit Act of 2009 (H.R. 717) was introduced by Representative Eddie Johnson (D-TX) on 01/27/09 and was referred to the House Committee on Ways and Means. One of its provisions was to make this tax credit permanent, but no further action was taken by Congress on this bill, resulting in R&D tax credit expiration on 12/31/09.

The American Recovery and Reinvestment Act of 2009 provided a 3-year extension of the Renewable Energy Production Tax Credit (PTC) through 12/31/12 -- a long way from making it permanent.

President Obama's FY2010 budget proposal included $75B to make this tax credit permanent. Congress didn't go along. On 09/08/10, President Obama proposed to expand and make permanent the R&D tax credit at a cost of about $100B through CY2020. The 111th Congress did not act on this proposal before it expired at the end of CY2010.

On 11/02/11, Congressman Dave Reichert (R-WA) introduced the "American Renewable Energy Production Tax Credit Extension Act of 2011" (H.R. 3307) which proposed to extend those tax credits from 01/01/14 to 01/01/17. On the Senate side, Senator Charles Grassley (R-IA) introduced the "American Energy and Job Promotion Act" (S. 2201) on 03/15/12 which would have extended the renewable energy credit to 01/01/15. Neither bill progressed beyond initial committee reviews and expired with the 112th Congress at the end of CY2012.

On 01/01/13, President Obama signed the "American Taxpayer Relief Act of 2012" (H.R. 8), extending the PTC for facilities producing energy from renewable resources by one additional year to 01/01/14. But the promise was to make these tax credits permanent.

This promise has not been fulfilled.
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TY-10
The Promise: "...provide a 20 percent tax credit on up to $50,000 of investment in small owner-operated businesses."
When/Where: Obama-Biden Plan for Small Businesses, dated 09/11/08.
Source: http://obama.3cdn.net/18bdb8988efb99208a_vtt5mvfkt.pdf
Status:Notwithstanding considerable assistance provided to small businesses under the American Recovery and Reinvestment Act of 2009, which did not provide for a 20% tax credit on up to $50,000 of owner-operator investments, an opportunity to deliver on this promise presented itself when President Obama signed the Small Business Jobs Act of 2010 (H.R. 5297) on 09/27/10. The Democrat-controlled Congress and he did not seize this opportunity.

This promise has not been fulfilled.
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